Apple (AAPL) Catches Some Ire for Pushing iPhone 5C, But Investors Should Cheer

September 17, 2013 8:51 AM EDT
Apple (Nasdaq: AAPL) may be playing it smart this time around with its latest iPhone offerings.

Some market watchers today noticed that Apple is pushing the iPhone 5C a little harder than the iPhone 5S, which is the premium version of the two. (The latest video is below, for reference.)

U.S. carriers are offering the iPhone 5C for zero or $99 with two-year contract, depending on the model chosen. The iPhone 5S is going fo $99 to $199, again, depending on memory capacity in the device.

But, this is a smart play by Apple. The iPhone 5C is a similar device to the iPhone 5S, save for a plastic shell and a few key components, the touch sensor on the 'Home' button being one of them. The iPhone 5C goes for $549 to $649 for 16- or 32-GB of memory, just $100 less than the iPhone 5S. That isn't a huge difference in Apple terms.

Instead, the company is marketing not only to emerging markets, but the next generation of Apple users. While those that are on their third or fourth iPhone aren't likely to jump ship anytime soon, the younger crowd has been turned off by seeing parents and teachers sport an iPhone. As a rule of thumb, kids generally don't want to be like their elders.

More iPhones in more hands leads to more App Store and iTunes users, which boast very generous margins when compared with hardware sales.

While some analysts were disappointed in the pricing structure for the new iPhone line, Apple might have more than just near-term gains in mind.

Shares of Apple are lower in early trading.

The iPhone 5C video:

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